The owner of LaunchByte.io LLC, a design and development shop and so-called “investment boutique,” as well as several other Boston-based investment companies has pleaded guilty in federal court in Boston to operating a Ponzi-like fraud scheme, according to the U.S. Justice Department.
Tanmaya Kabra, 27, of Beverly, who was arrested at Logan Airport two years ago, pleaded guilty Thursday before U.S. District Court Judge Denise J. Casper to four counts of wire fraud. He is set to be sentenced on Aug. 30. The charge of wire fraud carries a jail sentence of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss, whichever is greater.
Pitching himself as a serial entrepreneur, venture capitalist and startup mentor, Kabra lured investors to give money under the premise that it would be used to support startups, the DOJ has said. Instead, Kabra allegedly used the money to pay back debts to prior investors and to fund lavish personal expenses, including paying off credit card bills of more than $80,000 and to buy a boat in Peabody worth more than $200,000 over the Fourth of July holiday week in 2018.
As part of the plea agreement, Kabra admitted to victimizing more than 10 people who lost more than $1.5 million as a result of his scheme, the DOJ said.
In a statement through his attorney, Kabra said he has expressed remorse and remains committed to helping startups.
"By stepping forward to accept full responsibility, Tan Kabra is demonstrating his true remorse and desire to do the right thing. He is committed to moving forward with his life, to finish repaying those still owed, and to continue to work to support early stage companies seeking to develop innovative products,” said attorney Michael J. Connolly.
Acting U.S. Attorney Nathaniel R. Mendell and Joseph R. Bonavolonta, special agent in charge of the Boston division of the Federal Bureau of Investigation, announced the plea deal Thursday.